Employers have spent years measuring retirement readiness by participation and account balances. Here’s why that’s the wrong question, and what to ask instead.
Retirement used to be simple: work until a set age, then stop. That’s no longer how it works, for employees or the employers who support them.
Every day, 11,000 Americans turn 65
That’s not a wave on the horizon. It’s happening right now (BlackRock, Read on Retirement, 2025), and it’s colliding with a workforce that’s more financially stressed than employers may realize. Worker retirement confidence fell from 67% to 61% in the past year (EBRI, 2026 Retirement Confidence Survey). Nearly a quarter of workers changed their target retirement age in the last twelve months, and most pushed it later (EBRI, 2026).
We’ve been measuring the wrong thing
For years, employers and retirement providers have leaned on participation rates, contribution levels, and account balances as proxies for readiness. Those numbers are useful, but they don’t answer the only question that actually matters: can this person afford to retire?
The gap between perception and reality is wide. 64% of employees feel on track for retirement, but only 38% of employers believe their workforce actually is (BlackRock, Read on Retirement, 2025). Only 21% of defined contribution plan participants say they’re very knowledgeable about turning their savings into retirement income (AARP Retirement Income Literacy, 2026). A balance tells someone what they have. It doesn’t tell them whether that number turns into the life they want.
The cost of getting it wrong is real, and it’s expensive
This isn’t just an employee problem sitting off to the side of the business. Financial stress costs employers an estimated $1.1 trillion in lost productivity every year (American Institute of Stress, 2025). That’s not a line item in a benefits budget. It’s a business problem hiding in plain sight.
It shows up in workforce planning too. When employees can’t afford to retire, they often stay longer than planned:
- A single employee retiring later than planned costs an organization roughly $103,000 a year (Principal, 2025)
- Each one-year rise in the average retirement age adds 1–1.5% to total workforce cost (Prudential)
- 1 in 4 employees now expect to work past the age they planned to retire
Delayed retirements stall promotion paths and slow knowledge transfer. That has real downstream effects: 34% of employees who don’t see a clear path for advancement are actively job-searching (ADP People at Work Report, 2025).
Readiness is bigger than a number
Retirement isn’t a financial event. It’s a life transition, and treating it like a math problem misses most of what actually determines whether someone can retire well. True readiness rests on four pillars:
- Wealth — income sufficiency, savings trajectory, and debt, including the decumulation planning most people are never taught
- Health — healthcare costs and longevity risk that can undo an otherwise strong balance
- Purpose — for most people, work is tied to identity, and retirement can feel like a loss before it feels like freedom
- Legacy — estate readiness, family impact, and long-term continuity
Employers who only look at Wealth are seeing a quarter of the picture.
What employers can do
The employers getting ahead of this aren’t just offering a plan. They’re building guidance that reflects the full picture of readiness, one that helps employees move from uncertainty to a concrete next step, across saving and the harder, less-taught work of spending down assets in retirement.
That’s a meaningfully different ask than “here’s your 401(k) portal,” and it’s quickly becoming a competitive differentiator for retention and workforce planning.
Want to go deeper on this?
Watch a critical conversation, Retirement Readiness: The New Standard for Workforce Wellbeing, featuring Sean and Jennifer Peinert on what true retirement readiness means, and why it’s become a workforce issue, not just a benefits one.
Sources:
BlackRock, Read on Retirement (2025) · EBRI, 2026 Retirement Confidence Survey · AARP Retirement Income Literacy (2026) · American Institute of Stress (2025) · Principal (2025) · Prudential · ADP People at Work Report (2025)
